Examining the Empirical Relationship Between Happiness and Human Development in Emerging Economies

This study explores the empirical relationship between happiness and human development in seven emerging economies. The sample emerging economies are selected from the World Bank list, such as China, Russia, India, Indonesia, Brazil, Mexico, and Turkey. by using panel data from UNDP and our world in data from 2005 to 2020, this study first applies the panel cointegration test to determine whether there is a long-run relationship or not and to find that no long-run relationship between happiness and human development in emerging economies is manifested. Second, the ultimate application of panel VAR modeling entails that a one-way short-run causal relationship running from human development to happiness in emerging economies exists. This means that in the short-run, in emerging economies, human development causes happiness but not vice versa. Therefore, for building significant long-run relationships, those economies should focus on long-term strategies of economic freedom and mental health development.